User:Stuart G Hamilton

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Regulatory Risk Differentiation
It is probably clear to most observers that regulatory systems function because most clients do the right thing most of the time. In the case of taxes this is also generally true, as James Alm noted in 1996 “Most people pay most of their taxes most of the time”.

Without such a broad level of voluntary compliance, regulatory systems would be swamped with cases that called for intervention, which would quickly outstrip the resources and remedies available.

The compliance framework or model a regulatory authority uses (implicitly or explicitly) is like a lens that it uses to view its clients and becomes a shared value set that permeates its strategies, systems, and style of interactions with those clients. It becomes a key facet in shaping the compliance ‘culture’ of the organisation and even influences its structure, since structure generally follows strategy.

Compliance framework or model

The simplest compliance framework to have is a dualistic regulatory framework or model that views a client’s behaviours as being either right or wrong. A black or white model of compliance, often used for strict liability offences.

Risk isoquants – lines of equal risk

The approach does provide guidance for a considered and consistent regulatory response to resource changes and constraints in a dynamic risk environment.

--Stuart G Hamilton (talk) 08:04, 31 August 2009 (UTC)